How does access to development finance shape our cities?

Coiacetto, Eddo & Bryant, Lyndall (2014) How does access to development finance shape our cities? Urban Policy and Research, 32(3), pp. 305-321.

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Abstract

In market economies the built environment is largely the product of private sector property development. Property development is a high-risk entrepreneurial activity executing expensive projects with long gestation periods in an uncertain environment and into an uncertain future. Risk lies at the core of development: the developer manages the multiple risks of development and it is the capital injection and financing that is placed at risk.

From the developer's perspective the search for development capital is a quest: to access more finance, over a longer term, with fewer conditions and at lower rates. From the supply angle, capital of various sources - banks, insurance companies, superannuation funds, accumulated firm profits, retail investors and private equity - is always seeking above market returns for limited risk. Property development presents one potentially lucrative, but risky, investment opportunity. Competition for returns on capital produces a continual dynamic evolution of methods for funding property developments. And thus the relationship between capital and development and the outcomes for the built environment are in a restless continual evolution.

Little is documented about the ways development is financed in Australia and even less of the consequences for cities. Using publicly available data sources and examples of different development financing from Australian practice, this paper argues that different methods of financing development have different outcomes and consequences for the built environment. This paper also presents an agenda for further research into these themes.

Impact and interest:

1 citations in Scopus
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2 citations in Web of Science®

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ID Code: 78707
Item Type: Journal Article
Refereed: Yes
Additional Information: Published online 20 Jun 2014.
The embargo on the accepted manuscript version will expire on December 2015.
Keywords: Development Finance, Property development, Urban outcomes
DOI: 10.1080/08111146.2014.924922
ISSN: 1476-7244
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > COMMERCIAL SERVICES (150400) > Real Estate and Valuation Services (150403)
Divisions: Current > Schools > School of Civil Engineering & Built Environment
Past > QUT Faculties & Divisions > Faculty of Science and Technology
Copyright Owner: Copyright 2014 Taylor & Francis Group
Deposited On: 17 Nov 2014 22:32
Last Modified: 03 Jan 2016 12:39

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